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Back to the bottle shop as drinkers stay at home

Julian Lee

STRICTER licensing laws, smoking bans in pubs and the premium people have to pay for the privilege of sipping a tipple in a bar are set to fuel a boom in alcohol consumption at home, a report says.

The analysts IBISWorld say the amount spent on drinking alcohol at home or at private parties, as opposed to in bars, clubs or hotels, is set to rise dramatically.

An IBISWorld analyst, Audrey Riddell, said a tightening of belts would help fuel sales at bottle shops. "We have seen an increase in people consuming either at home or at private parties. It is as much a lifestyle preference as anything else.

"The price people are paying on premise compared to off premise is also going to have an effect," she said.

Although IBISWorld does not collect pricing data, Ms Riddell said people could expect to pay up to four times as much for a drink in a bar as in a bottle shop.

Strong competition in bottle shops, in particular the big-box outlets such as Woolworths-owned Dan Murphy's and Coles's First Choice, has driven down the price of premium brands, she noted in the report Liquor Retailing In Australia.

"People still want to consume higher quality products, they just want to consume them at home," she added.

Ms Riddell said another factor was continued urban sprawl, which was making it harder and more expensive to go out to bars.

The last survey of drinking habits was by the Australian Bureau of Statistics, which found there was an increase in drinking outside the home. In 1999, 34 per cent of spending on alcoholic beverages took place on premise. By 2004 that had risen to 38 per cent.

That trend appears to have reversed, with IBISWorld predicting a dramatic turnaround; it is forecasting that the on-premise figure will fall to 31 per cent by the end of this calendar year.

The report comes as Citigroup tries to predict the effect of further restrictions on the sale of some alcoholic drinks or bans on alcohol advertising, the latter being the subject of a Senate inquiry.

A ban on higher alcohol ready-to-drink spirits (RTDs) would prompt a shift to lower alcoholic RTDs as well as to wine and beer, and would not result in a decrease in overall alcohol consumption.

However, higher taxes on "problem" drinks could hit sales of RTDs the most, as younger drinkers, who make up the core market, are more price-sensitive, Citigroup noted in the latest issue of its Thirsty Thoughts.

An advertising ban would result in a volume decline of less than 1 per cent.